Research methods
PESTLE analysis: a template, a worked example and how interviews fill each factor
How to do a PESTLE analysis that informs a decision: the six factors, a template, a hypothetical EV charging example, and whom to interview to test each factor.
A PESTLE analysis lists the political, economic, social, technological, legal and environmental factors outside an organization that could affect a decision. The CIPD, a UK-based professional body for people professionals, describes it as a broad fact-finding exercise about external factors, meant to help an organization make the most of opportunities and reduce threats. CIPD: PESTLE analysis It grew out of PEST, a framework for scanning the business environment that Wikipedia's summary credits to Francis Aguilar in 1967. PESTLE adds legal and environmental factors. Wikipedia: PEST analysis
The common weakness is a list of factors with no link to the decision. Wikipedia's summary quotes the warning that "it is all too easy to produce lists of factors" while understanding their cause-and-effect relationship with the business is harder. The CIPD lists similar risks: deciding on too little data, collecting so much that nothing gets decided, and relying on assumptions that later prove wrong.
Below: a template, a hypothetical worked example, and how interviews with operators and regulatory experts fill in each factor.
Where PESTLE fits
PESTLE covers the wide environment: governments, the economy, society, technology, law and the physical world. Porter's five forces covers the structure of one industry: buyers, suppliers, entrants, substitutes and rivals. A SWOT analysis combines your internal strengths and weaknesses with external opportunities and threats, and a PESTLE often supplies the external half. The CIPD suggests using PESTLE alongside SWOT, Porter's five forces, competitor analysis or scenario planning.
The PESTLE template
The CIPD's factsheet gives examples for each factor. Political: tax policy, trade restrictions, tariffs and political stability. Economic: growth, interest, exchange, inflation and wage rates, and credit availability. Social: cultural norms, population growth, age distribution and attitudes. Technological: new technologies and the rate of change. Legal: changes to legislation on employment, imports and exports, and taxation. Environmental: sustainability, ethical sourcing and emergencies.
Use one row per factor, and keep the evidence beside it:
| Factor | What could change | How it would change our decision | Evidence now | Who could confirm or reject it | Likelihood and impact |
|---|---|---|---|---|---|
| Political | |||||
| Economic | |||||
| Social | |||||
| Technological | |||||
| Legal | |||||
| Environmental |
The last three columns turn a list into something you can act on.
A worked example: an EV charging operator entering a new state
Suppose a company runs 40 fast-charging sites in one state and is deciding whether to build 15 more in a neighboring state over the next two years. The company, its plans and every finding below are hypothetical. The leadership team's first draft:
| Factor | Hypothesis | Starting evidence |
|---|---|---|
| Political | Public funding could cover part of the cost of new sites, but programs can change with budgets | The Department of Energy's Alternative Fuels Data Center (AFDC) keeps a database of federal, state and utility incentives |
| Economic | Electricity costs and how often chargers are used decide whether a site makes money | The neighboring state's utility rate filings |
| Social | Demand depends on how many drivers nearby rely on public charging | The AFDC notes that most EV owners do most of their charging at home |
| Technological | New sites may need more than one connector type | The AFDC says SAE International is standardizing the J3400 connector based on Tesla's NACS design, and that several automakers have announced adopting it |
| Legal | Permits and utility connection rules set the build schedule | State permitting rules and utility interconnection procedures |
| Environmental | Weather and flood risk can take sites offline | Flood maps and the company's own outage records |
Sources: AFDC Station Locator, AFDC: EV charging stations. The AFDC Station Locator also shows public and private stations with counts by state, so the team can count existing fast chargers in the target state before talking to anyone. The AFDC's charging page names federal programs, such as the National Electric Vehicle Infrastructure Formula Program, as sources of fast-charging funding. Check each program's current status rather than assuming it.
Every row is still a hypothesis: desk research shows which questions to ask, and people who do the work can tell you which answers hold in this market.
Fill in each factor with interviews
| Factor | Whom to ask | Questions |
|---|---|---|
| Political | State energy office staff, regulatory consultants, former agency staff | Which programs funded charging in this state over the last two years, and how were awards decided? What would change them? |
| Economic | Utility account managers who serve charging sites, operators of existing stations | In a slow month, how much of a site's electricity bill comes from peak-demand charges? What utilization did your first sites reach in year one? |
| Social | Fleet managers, managers of stores or restaurants that host chargers | Where do your drivers or customers charge now? What would make them use a new site? |
| Technological | Charging network operations managers, field service leads | Which faults take chargers offline most often? Which connectors are you installing on new sites, and why? |
| Legal | Regulatory consultants, utility interconnection specialists | How long did your last connection take from application to power-on, and what delayed it? Which permits took longest? |
| Environmental | Site developers, operations managers | Which sites lost the most uptime to weather, and what did you change afterward? |
For legal and political factors, separate what the rule says from how it works in practice. Read the text yourself. Federal rules and proposed rules appear in the Federal Register. Then ask a regulatory expert how it is applied, how long approvals actually take and what usually goes wrong. The second part is rarely written down.
Three habits keep the interviews useful:
- Ask about recent events. "How long did your last interconnection take?" gets a better answer than "Is interconnection slow?"
- Count agreement. If four of five operators name the same delay, it belongs in the analysis. If one does, note it and keep asking.
- Tie each answer to the decision. After every call, update the "How it would change our decision" column.
In the example, the team might learn from three operators and two utility specialists that connection timelines, more than funding, set the schedule, and that peak-demand charges make low-traffic sites lose money in their first year. The decision might then become: apply for utility connections at the five strongest locations now, and wait on the other ten until the first five show their usage.
Rate the factors and decide
The CIPD's steps finish by rating each item by its risk to the organization, identifying options, sharing the findings with decision makers and deciding what to act on and what to monitor. A simple version: rate each factor high, medium or low for likelihood and for impact, act on anything high on both, and set a date to check the rest. The CIPD also says a PESTLE needs repeating regularly to be useful. Put a date at the top.
Common mistakes
- No decision at the top. Without one, every factor looks equally important.
- Filling it in from memory. Each row should cite a document, a dataset or a count of interviews.
- Treating it as a forecast. The CIPD warns that the pace of change makes future developments hard to anticipate. A PESTLE shows what to watch, not what will happen.
- Asking regulators' former staff for inside information. Ask about how processes work in general, not about pending decisions or confidential cases. What to do when an expert cannot share confidential information covers the boundary.
Your next step
Write the decision at the top of the template. For each letter, write one factor that could change it and the role of someone outside your company who would know. Book two interviews for the two factors you know least about.
Instant Expert can find people who match a description you write, such as "network operations managers at EV fast-charging companies" or "interconnection specialists at electric utilities." You review who it finds, it sends your invitations, and you pay only for calls that get booked. The directory pages for EV charging network operations experts and utility interconnection queue experts are one place to start.